Investment Rating - The industry rating is "Outperform the Market" [8][66] Core Insights - The report highlights the continuation of housing tax refund policies and a reduction in the down payment ratio for commercial properties, which are expected to support the real estate market [3][13] - The report anticipates a turning point in the building materials capacity cycle due to supply-side reforms and a recovery in home buying willingness driven by lower interest rates and supportive policies [6][13] - The report notes that the real estate market is gradually stabilizing, with an increasing probability of recovery in post-cycle demand for building materials [6][13] Summary by Sections Investment Highlights - The Ministry of Finance, State Administration of Taxation, and Ministry of Housing and Urban-Rural Development have announced the extension of tax refund policies for homeowners [3] - The central bank has adjusted the minimum down payment ratio for commercial housing loans to no less than 30% [3] - Various cities are implementing measures to promote stable development in the real estate market, including urban renewal projects and government subsidies for home purchases [3][13] Market Data - As of January 16, 2026, the national average price of bulk P.O 42.5 cement is 335.5 CNY/ton, showing a 0.9% decrease from the previous week and a 16.0% decrease year-on-year [4][14] - The national average price of glass (5.00mm) is 1097.1 CNY/ton, reflecting a 0.4% increase from the previous week but a 16.9% decrease year-on-year [4][22] Sector Review - The Shanghai Composite Index fell by 0.45%, while the Shenzhen Composite Index rose by 1%. The building materials index decreased by 0.67% [5][51] - Sub-sectors such as refractory materials and fiberglass manufacturing showed positive growth, while cement and glass manufacturing experienced declines [5][51] Investment Recommendations - The report suggests focusing on three main lines of investment: high-quality companies benefiting from stock renovations, undervalued stocks with long-term alpha attributes, and leading cyclical building materials companies showing signs of bottoming out [6]

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report - Last week, the bond market recovered, with relatively stable credit spreads and narrowing spreads for Tier 2 and perpetual bonds. The weakening of the stock - bond seesaw effect and positive factors such as better - than - expected 30 - year Treasury bond issuance and regulatory measures on the A - share market improved bond market sentiment. Although the expected RRR cut did not materialize, the central bank's press conference sent positive signals, and the bond market may continue to repair [2][14]. - The central bank emphasized that there is still room for RRR cuts and interest rate cuts. Considering economic data and market conditions, these measures may be implemented around the Two Sessions in March. The central bank may also flexibly adjust its bond - buying operations in response to bond supply and yield curve changes [3][20]. - Despite potential disturbances to the capital market in the future, the central bank is likely to maintain loose liquidity. The DR001 central rate in January is expected to be around 1.3% - 1.35% [5][49]. - December's financial data was better than expected, but there is still pressure for the subsequent decline in social financing and M2 growth rates. The bond market may face short - term disturbances as interest rates approach previous lows, but there are signs of an interest rate peak, and there is no need to be overly pessimistic about the bond market [52][74]. 3. Summary by Relevant Catalogs 3.1 1 - month RRR cut did not materialize, but the central bank's press conference sent positive signals in terms of policy and bond - buying space - The central bank emphasized that there is still room for RRR cuts and interest rate cuts. External factors do not strongly constrain interest rate cuts, and the reduction of the central bank's re - lending rate creates conditions for interest rate cuts. The RRR cut may be postponed due to concerns about overheating in the capital market [3][20]. - The central bank can tolerate M2 and social financing growth rates being higher than the target to a certain extent and may maintain a loose liquidity environment to support credit. The central bank also elaborated on the significance of Treasury bond trading and may increase the scale and extend the term of bond purchases [4][27]. 3.2 Mismatch between capital injection and leakage caused fluctuations, and the non - implementation of the RRR cut did not hinder capital loosening - In December, the decline in government deposits was lower than expected, resulting in a lower - than - expected excess reserve ratio of 1.6%. The capital remained loose possibly due to abundant non - bank liquidity [32]. - In the first week of January, the excess reserve ratio was estimated to be only 0.9% due to OMO net withdrawal and government bond net payment. External disturbances such as government bond net payment, maturity of repurchase agreements, and North Exchange IPO subscriptions led to a temporary tightening of capital, but the situation eased after the central bank's operations [38]. - In the next month, factors such as tax payments, government bond payments, and cash - withdrawal demand may disrupt the capital market. However, the central bank's attitude indicates that the capital market is unlikely to experience significant fluctuations, and the DR001 central rate in January is expected to be around 1.3% - 1.35% [44][49]. 3.3 December's financial data was better than expected, but the subsequent social financing and M2 growth rates may continue to decline - In December, new credit was 9100 billion yuan, better than expected. Corporate credit improved, but household credit was weak. The decline in household short - term and medium - long - term loans shows that the real estate market is still clearing, and households are repairing their balance sheets [52]. - December's new social financing was 2.21 trillion yuan, and the stock's year - on - year growth rate dropped to 8.3%. Although it was better than expected, there is still pressure for a decline in the subsequent social financing growth rate due to the high base of Q1 credit and the slowdown in government bond net supply [58]. - In December, the M2 growth rate rose to 8.5%. The increase was mainly due to factors such as bank foreign exchange settlement surplus and non - bank deposit base effects. However, the M1 growth rate declined, indicating a possible slowdown in deposit activation [59][65]. 3.4 Interest rates are approaching previous lows and may face disturbances, but the trend of shock repair is still expected to continue - After last week's repair, the yields of Treasury bonds of various maturities (except ultra - long - term) are lower than those at the end of 2025. Although the market may face short - term disturbances as interest rates approach previous lows, the strong configuration willingness of banks and insurance companies is a clear signal of an interest rate peak [74]. - There is no need to be overly pessimistic about the bond market. If the capital remains loose and government bond supply does not cause the expected impact, the 10 - year Treasury bond may break through the December low of 1.83%. It is recommended to maintain a certain leverage and participate in the trading opportunities of 10 - year policy - financial bonds [8][74].

Investment Rating - The industry rating is "Outperform the Market" indicating that the overall return of the industry is expected to exceed the market benchmark index by more than 5% in the next 6 months [5][40]. Core Insights - TSMC plans to significantly increase its capital expenditure to meet the strong demand for artificial intelligence and high-performance computing, with a projected investment of up to $56 billion by 2026, a 36.9% increase from the previous year [4][23]. - The semiconductor materials sector is experiencing rapid domestic production acceleration, with major companies benefiting from industry dividends. Notable mentions include Tongcheng New Materials and Huate Gas, which are making strides in import substitution [4][23]. - The new materials industry is expected to grow rapidly due to ongoing manufacturing upgrades and increasing demand for high-standard, high-performance materials [4][23]. Market Overview - The Wind New Materials Index closed at 5779.39 points, reflecting a week-on-week increase of 0.98%. The semiconductor materials index rose by 8.12%, while other sub-indices showed modest gains [3][8]. - The top gainers for the week included Aladdin (20.24%), Anji Technology (12.69%), and Shanghai Xinyang (12.29%), while the largest decliners were Pulit (-17.28%) and Double Star New Materials (-4.22%) [20][21]. Recent Industry Highlights - TSMC's capital expenditure is part of its largest overseas capacity expansion plan, having invested over $180 billion since 2020 [4][23]. - The U.S. announced a 25% tariff on certain imported semiconductors and semiconductor manufacturing equipment, which may impact key products from companies like NVIDIA and AMD [23][24]. - Jinfa Technology has invested in a core supplier for Tesla's robots, which is preparing for an IPO, highlighting the growing importance of high-performance engineering plastics in robotics [4][24].

Group 1 - The core viewpoint of the report highlights that the electricity shortage in North America may lead to the emergence of a "behind-the-meter" power supply model, driven by the aging US power grid and the need for upgrades, alongside the increasing demand for electricity due to AI infrastructure [1][10][21] - The report emphasizes that the demand for related electrical equipment will grow, particularly in gas turbines, solar storage, SOFCs, transformers, and AIDC equipment, as the power equipment sector is currently in a major cycle driven by AI [1][10][21] Group 2 - The market observation indicates a decrease in the stock-bond yield spread to 0.4%, which is below the +1 standard deviation, suggesting a decline in valuation differentiation [2][35] - Market sentiment has adjusted, with a decrease in industry rotation intensity, indicating a shift in market dynamics [2][36] - The report notes that the average daily trading volume of the Stock Connect increased by 740 billion yuan compared to the previous week, with net inflows of leveraged funds primarily into the electronics, communication, and computer sectors [2][48] Group 3 - The industry configuration suggests a focus on performance fundamentals, with the upcoming annual report disclosures expected to drive market transactions based on fundamental performance [3][63] - The report identifies three key areas with solid fundamental logic worth attention: 1) Electrical equipment, with a projected investment of 4 trillion yuan in China's State Grid during the 14th Five-Year Plan, a 40% increase from the previous plan; 2) Computing power, with TSMC's revenue expected to reach $33.73 billion in Q4 2025, reflecting strong demand for AI computing; 3) Price increase chains in metals, chemicals, and storage sectors showing high prosperity [3][28][64] Group 4 - Industry hotspots include the integration of the Qianwen App with Alibaba's platforms, testing AI shopping functionalities, and the State Grid's announcement of a 4 trillion yuan investment plan for the construction of a new power system [2][59][60] - The report highlights the trend of large tech companies exploring the "behind-the-meter" power supply model to address the electricity demand from AI infrastructure, with legislative proposals allowing AI data centers to bypass federal electricity regulations [10][19][21]

Investment Rating - The industry rating is "Outperform the Market," indicating that the overall return of the industry is expected to exceed the market benchmark index by more than 5% in the next 6 months [51]. Core Insights - TSMC plans to significantly increase its capital expenditure to meet the strong demand for artificial intelligence and high-performance computing, with a projected investment of up to $56 billion by 2026, a 36.9% increase from the previous year's $40.9 billion [3][27]. - The semiconductor materials sector is experiencing rapid domestic production acceleration, with major companies benefiting from industry growth and market demand [3][27]. - The new materials industry is expected to grow rapidly due to ongoing manufacturing upgrades and increasing demand for high-standard, high-performance materials [3][27]. Market Overview - The Wind New Materials Index closed at 5779.39 points, up 0.98% week-on-week. The semiconductor materials index rose by 8.12% to 10157.68 points, while other sub-indices also showed positive growth [2][8]. - The top five gainers this week included Aladdin (20.24%), Anji Technology (12.69%), and Shanghai Xinyang (12.29%), while the top five losers included Pulit (-17.28%) and Double Star New Materials (-4.22%) [2][23][25]. Recent Industry Highlights - TSMC's capital expenditure increase is part of its strategy to expand production capacity, having invested over $180 billion since 2020 [3][27]. - The U.S. has announced a 25% tariff on certain imported semiconductors and semiconductor manufacturing equipment, which may impact the market dynamics [27][28]. - Jinfa Technology has invested in a core supplier for Tesla's robots, which is preparing for an IPO, highlighting the growing interest in high-performance engineering plastics [3][28].

Investment Rating - The report maintains an "Outperform" rating for the industry [7] Core Insights - The 2026 International Consumer Electronics Show (CES) showcased advancements in smart home appliances, with Chinese brands leading in categories such as robotic vacuum cleaners, garden robots, and NAS private cloud storage [3][4][14] - Key products include the G-Rover by Stone Technology, which is the world's first stair-cleaning robotic vacuum, and various innovative garden robots from Ninebot [3][4][14] - The report emphasizes the continuous improvement in product capabilities and the increasing penetration of these technologies, suggesting a focus on innovative companies like Stone Technology, Ecovacs, Ninebot, and Ugreen [3][4][14] Market Data - The home appliance sector saw a slight increase of 0.2% this week, with specific segments showing varied performance: white goods down by 2.0%, black goods up by 6.2%, small appliances up by 3.0%, and kitchen appliances up by 6.9% [5][40] - Raw material prices fluctuated, with LME copper increasing by 1.91% and LME aluminum decreasing by 1.04% compared to the previous week [5][40]

Group 1 - The report highlights that the volatility in the Chinese market is expected to drive short-term thematic growth while also indicating a long-term style shift [2][3] - The report notes that the recent cooling of inflation in the U.S. provides a moderate but not overwhelming space for the Federal Reserve's policy adjustments [3][8] - It emphasizes the potential for the Chinese market to undergo a significant long-term style shift during the release of overseas risks, alongside a continued substantial appreciation of the Renminbi [3][4] Group 2 - The semiconductor sector is viewed positively in the short term, with a specific focus on the storage segment due to emerging supply-demand contradictions [3][27] - Long-term investment opportunities are identified in insurance, central state-owned enterprise dividends, anti-involution industries, Chinese concept internet companies, and military trade [3][4] - The report indicates that the technology sector has shown significant gains, while financial real estate and consumer sectors have experienced deeper declines [19][24] Group 3 - The report mentions that the A-share market has seen a notable performance from the Sci-Tech 50 index, which rose by 2.58%, while the Shanghai Composite Index fell by 0.45% [12][19] - It points out that the external capital index positions have weakened, with net short positions expanding [35][36] - Upcoming focus will be on U.S. PCE inflation data and Chinese economic indicators [38]

Investment Rating - The industry rating is "Outperform the Market" [4] Core Insights - The pig farming sector is experiencing a slow pace of market release, leading to a rebound in pig prices. As of January 16, the pig price is 12.77 CNY/kg, with a week-on-week increase of 0.19 CNY/kg. The average monthly release completion rate is 31%, lower than the same period last year [2][9] - In the beef sector, calf prices are rising due to increased replenishment enthusiasm following the implementation of import beef restrictions. As of January 16, calf prices are 33.03 CNY/kg, up 1.91% week-on-week, indicating a long-term upward trend in beef prices [3][29] - The poultry sector is seeing a decline in chick prices as the market transitions out of a vaccination pause. As of January 16, the price for white feather broiler chicks is 2.74 CNY/chick, down 0.85 CNY/chick from before the pause [3][38] Summary by Sections Pig Farming - The slow release pace in pig farming is pushing prices up, with profits for self-bred and purchased piglets at 7.39 CNY/head and 48.35 CNY/head respectively, both showing week-on-week increases [2][9] - The average weight of pigs being released has increased to 128.85 kg, with a week-on-week rise of 0.31 kg [12][17] - The number of breeding sows has decreased to 39.9 million, down 1.12% from the previous month, indicating a gradual reduction in production capacity [27][28] Beef Sector - The implementation of import beef restrictions is expected to benefit domestic beef prices, with a forecasted upward trend in prices from 2026 to 2027 [29] - The current price for fattened bulls is 25.66 CNY/kg, reflecting a week-on-week increase of 0.59% [29] Poultry Sector - The egg price has increased to 7.29 CNY/kg, up 0.69% week-on-week, driven by pre-holiday stocking [3][42] - The profit margins for broiler chickens and parent stock are showing mixed results, with broiler chicken farming profit at 0.3 CNY/chick and slaughter profit at -0.51 CNY/chick [3][38] Seed Industry - The seed industry is seeing strengthened intellectual property protection, which is expected to enhance market order and accelerate the commercialization of genetically modified organisms [49]

Investment Rating - The report maintains an "Outperform" rating for the industry [7] Core Insights - The report highlights significant growth in the solid-state battery sector, projecting a battery production of 1756 GWh by 2025, representing a 6% year-on-year increase [2][11] - The continuation of anti-dumping duties on polysilicon from the US and South Korea is expected to strengthen China's photovoltaic industry chain and protect domestic production [21][22] - The offshore wind sector benefits from the completion of an 8.4 GW auction in the UK, which is expected to positively impact related Chinese supply chain companies [31][32] - The nuclear fusion sector sees advancements with the "Xuanlong-50U" achieving hydrogen-boron fusion, marking a significant milestone in clean energy development [41][42] - The global energy storage market is projected to reach 498 GWh in 2025, with significant growth in both Germany and the US [45][46] Summary by Sections 1. New Energy Vehicles and Lithium Battery Sector - Solid-state batteries are expected to enhance space energy applications, with a projected production of 1756 GWh by 2025, a 6% increase [2][11] - In December, China's total battery production reached 201.7 GWh, a 62.1% year-on-year increase [11] 2. Photovoltaic Sector - The Ministry of Commerce's extension of anti-dumping duties on US and South Korean polysilicon aims to protect the domestic photovoltaic industry [21][22] - The report indicates that this policy will create a stable environment for domestic polysilicon production and help resist external price pressures [22] 3. Wind Power Sector - The UK completed an 8.4 GW offshore wind auction, which is expected to benefit Chinese supply chain companies [31][32] - The Guangdong Sanshan Island flexible direct current transmission project is progressing well, with production expected to be completed by 2026 [33] 4. Nuclear Fusion Sector - The "Xuanlong-50U" has achieved hydrogen-boron plasma H-mode discharge, marking a key milestone in nuclear fusion technology [41][42] 5. Energy Storage Sector - Global energy storage system shipments are expected to reach 498 GWh in 2025, with significant contributions from domestic manufacturers [45][46] - The report anticipates that the energy storage market will continue to grow rapidly, with projections of 900 GWh in shipments by 2026 [45]

Investment Rating - The report maintains a strong investment rating for the military industry, particularly focusing on the SpaceX supply chain and domestic rocket industry as key investment areas [2][40]. Core Insights - The report highlights the recent decline of the Shenwan Military Industry Index by 4.92% from January 12 to January 16, 2026, while the CSI 300 Index fell by only 0.57%, indicating a relative underperformance of -4.35 percentage points [2][40]. - It emphasizes the importance of focusing on the SpaceX supply chain and domestic rocket industry, which are expected to be the fastest-growing and most inflation-resistant sectors [2][40]. - The report suggests that the SpaceX supply chain is progressing rapidly, with expectations for commercial deployment of Starship and V3 satellites by 2027, leading to significant revenue realization from 2027 to 2030 [3][42]. - The domestic rocket industry is also highlighted as a core area, with plans for breakthroughs in reusable rocket technology and future industry layouts [3][42]. Summary by Sections Market Review - The Shenwan Military Industry Index has seen an 8.04% increase since 2026, outperforming the CSI 300 Index, which increased by 2.20% [15]. - The report notes that various sub-sectors within the military industry have experienced declines, particularly the aerospace sector, which fell by 10.56% [20][14]. Investment Opportunities - Recommended companies in the SpaceX supply chain include Lens Technology, Yujing Co., and Maiwei Co. [3][42]. - Key domestic rocket industry companies to watch include Feiwo Technology, Western Materials, and Silver Bond Co. [3][42]. - Ground terminal companies such as Shengyang Technology and Haige Communication are also highlighted for their potential high revenue realization [3][42]. Financial Insights - The report indicates a net outflow of 2.629 billion yuan from military ETFs during the week, with a decrease in leveraged fund inflows, suggesting a temporary reduction in market volatility [27][32]. - As of January 16, 2026, the military industry index has a TTM price-to-earnings ratio of 85.05, placing it in the 99.61 percentile historically [45][36].